Analysis – Last month, Microsoft’s market share in the browser dropped below 70% for the first time in eight years, while Mozilla broke the 20% barrier for the first time in its history. Initial data sets provided by Net Applications suggest that the Internet Explorer will drop once again significantly in December to below 69% and Mozilla will climb above 21%. IE8 is just around the corner, but current market share data suggests that Microsoft has no effective tool to stop the bleeding at this time – and Mozilla can pick up two out of every three users Microsoft surrenders.
It is a bit early to draw conclusions about December market share data, but if Net Applications’ numbers are somewhat correct, then it is clear that Microsoft’s Internet Explorer (IE) will end 2008 with a historic market share loss in a software segment Microsoft believed was key to its future business in the late 1990s. So far, IE posted an average market share of 68.37% for the first 22 days of this month, which is down from 69.77% in November and down from 75.47% in January. At the same time, Firefox has solidified its position above the 20% mark and has posted an average of 21.25% for December, up from 20.78% in November and up from 16.98% in January. In fact, Firefox has achieved daily market shares of up to 23.60% this month, while IE has fallen as low as 64.13%.
Firefox is not the only browser to steal market share from IE. Google’s Chrome is on track to achieve a market share of more than 1% for the first time this month. According to Net Applications, Chrome has not fallen below the 1% mark over the past seven days and has hit a record of 1.22%. Apple’s Safari is currently at 7.82%, up from 7.13% last month and Opera is somewhat stable at 0.70% (down from 0.71%). It is clear that IE now has multiple rivals that may not be able to touch its market share base just yet, but they are eating away market share at an accelerating pace. Now there is the obvious question just how serious this scenario really this for IE.
Realistically, Microsoft has still the commanding lead in the browser market. 68% and more is nothing to sneeze at and is still a comfortable cushion, even if Microsoft continues to lose about 7% share every year. However, the pace of the market share loss has been accelerating over the past six months – and especially since Firefox 3 was released. Since Safari and Chrome are growing into alternatives to Firefox and IE, the potential threat may only increase over the next few months.
Let’s look at a chart of absolute market share numbers first. This chart only covers the fourth quarter of this year, but it is obvious that IE is losing traction. By the way, the characteristic highs and lows of the market share number are caused by during-the-week and weekend usage of browsers: IE6 loses a lot of share on the weekend, while other browsers such as IE7, Firefox, Safari, Opera and Chrome gain. IE6 is still the dominant browser in business environments, but is slowly being phased out.
If you look closely, Firefox and Safari have steadily gained market share over time, while all IE versions lost share – IE6 faster than IE7, which suggests that more businesses are upgrading their browsers and not all stay with Microsoft.
IE’s losses become somewhat more apparent when we look at the percentage loss, and not at the absolute numbers. In the following chart we visualized the market share loss/gain compared to the September 2008 baseline value of each browser. Take these growth numbers with a grain of salt, since we are dealing with substantially different baselines here.
IE was the only major browser to lose market share in this quarter. The huge dips are caused once again by IE6. Notice the mirror effect in market share numbers and how other browsers grow when IE falls. Both Mozilla and Apple are seeing substantial growth that seems to take advantage of IE’s current weaknesses. Google is probably the most impressive performer in this chart as it demonstrates strength in both home and business applications. However, we should not forget that Chrome has a market share of just about 1% at this time.
Read on the next page: Mozilla picks up two out three users Microsoft loses
The decline of IE is more evident when we compare the percentage losses/gains of just IE and Firefox. The mirror effect between the two graphs is stunning and they indicate a strong relationship between Firefox and IE usage. Considering the fact that IE has still more than three times the market share of Microsoft, Net Applications numbers suggest that Mozilla is able to pick up two out every three users Microsoft loses. This should be a convincing reason for Microsoft to take Mozilla and its Firefox browser much more seriously.
Let’s look at the percentage gains and losses of IE browsers only. We did not include versions IE5 and lower due to their insignificance.
Internet Explorer 7 is somewhat stable, but shows a tendency to drop. Internet Explorer 6 is on a clear path of decline. Current market share highs during the week are at about 22%, down from more than 25% three months ago. The lows are at about 15%, down from about 18% in October.
It is clear that IE7 is not picking up the market share IE6 drops, but what about IE8 (beta)? The browser is showing strong growth, but the growth is based on a base line market share of just 0.48%. There is continuous adoption of the browser, which is now expected to be in the range of about 10 million, give or take a few hundred thousand users. Considering the current trend and estimates that IE may have lost almost 50 – 70 million users this year, IE8 is clearly not picking up users fast enough.
We have had the chance to review IE8 RC1 already and we doubt that this software will be a solution to Microsoft’s browser problems. At least from a technical perspective, IE8 appears to be a software from a different time. It has proprietary features and is rather bulky and slow. IE8 faces a much more nimble competition which, again, from a technical perspective, will remain the top choice for users, whether it will be Firefox, Opera, Chrome or Safari (if Apple finally gets its security features into place).
The current pace of market share loss is amplified by the holiday period and the fact that IE6 is rather weak as a result. Nevertheless the pace is stunning and if Microsoft does not come up with a winning concept for a new IE8.5 or IE9, continued market share loss is likely as more consumers and corporations replace their IE6 browsers.
Windows 7 may be an opportunity to introduce such a new browser and stabilize and increase Microsoft’s browser market share again. Until then there is little that will keep other browsers from gaining market share from IE.
To us, it is rather surprising how easily Microsoft is surrendering browser market share in a time where web browsers are growing into a cloud UI on client computers. Microsoft will need an effective browser for Windows Azure soon and the company needs to drop the idea of proprietary features, comply with web standards and come up with a more modern and faster browser engine.
Right now, it seems the browser market is up for grabs and Microsoft’s Internet Explorer will need to compete for market share just like any other browser out there.